With India expecting cotton production of 400 lakh bales this season (October 2017 to September 2018), the Cotton Corporation of India should procure at least 100 lakh bales during the peak arrival months so that prices remain stable, said J. Thulasidharan, president of Indian Cotton Federation.
In a memorandum to the Prime Minister, Mr. Thulasidharan said that according to the International Cotton Advisory Committee, globally cotton production is expected to be 75 % in surplus during the current year. This is likely to impact prices, especially for farmers in the country.
In India, most of the arrivals will be between November 2017 and February 2018. There might not be sufficient buyers in the market during this period and only those who have financial resources will buy cotton in bulk. There are possibilities of more exports too. In order to ensure that farmers get remunerative prices, the Cotton Corporation of India (CCI) should step in and buy 100 lakh bales during the peak season.
Farmers in Gujarat, Telangana, Andhra Pradesh, and Maharashtra will benefit if the Government agency steps in and buys substantial quantity.
It should ensure that the prices do not drop below the Minimum Support Price. The CCI can supply cotton to the mills directly in the later months of the season. Thus, there will be price stability throughout the season and farmers and the mills will benefit. The domestic textile mills are expected to consumer 300 to 310 lakh bales of cotton.
Further, in order to help the industry invest in value addition and buy more cotton, the commercial banks should finance the textile mills at 7 % interest and 15 % margin money under the NABARD Agri Finance so that the mills can buy cotton. This will ensure raw material security to the mills, he added.
